Cost of L.A.’s Sludge Plant Could Jump by $50 Million

Los Angeles city engineers said Tuesday that the experimental Hyperion sludge plant, delayed almost three years by fires and other troubles, could end up costing $400 million, about $50 million more than they ever acknowledged before.

Based on city records, The Times reported Jan. 3 that the troubled project would cost about $350 million, more than double what City Council members were told when the plant was first considered in 1979. But deputy City Engineer Larry Lewis, under questioning Tuesday by a City Council committee, said the figure was even higher if some early design expenses were included.

The Hyperion Energy Recovery System was authorized by Mayor Tom Bradley and the City Council in 1980 as the preferred, if untried, way to comply with a federal order that Los Angeles stop dumping sewage sludge in Santa Monica Bay. By 1985, the system was supposed to dry the sludge into a powder, burn the powder to produce electricity and leave only a small amount of ash to be taken to local landfills.

However, a long string of unexpected snarls have delayed completion, driving up the cost and causing the city to pay a $625,000 fine, the highest ever imposed on a city for violations of the federal Clean Water Act. The city has given up hope of ever burning all its sludge in the Hyperion Energy Recovery System furnaces, even when the system is operational. Most sludge now is trucked to landfills.

The $400-million figure used by Lewis Tuesday is far above the amount city attorneys included last week in legal papers they are required to file with federal appeals Judge Harry Pregerson, who oversees the 11-year-old lawsuit against Los Angeles by the Environmental Protection Agency.

In the court papers, the city advised Pregerson that the “total project cost” for the Hyperion Energy Recovery System has been $233 million. The same $233-million figure was included in an October filing with Pregerson’s court.

But Tuesday, city engineers said the figure is not actually the total because it does not include the costs of consultants and the city engineers themselves, many of whom have spent most of the last six years trying to make the Hyperion Energy Recovery System plant work, despite fires, clogs and other sludge-handling problems.

The engineers said there was no desire to hide anything from Pregerson, but that they were used to expressing the cost of the Hyperion Energy Recovery System only in terms of construction contracts and the amount spent to buy equipment. The costs of consultants and the time expended by city employees are not typically included, they said.

“I don’t think it’s misleading,” Division Engineer Bradley Smith said Tuesday.

But city records show that fees for the consultants who are guiding the city’s work have been a significant part of the Hyperion Energy Recovery System cost. A report in December by the chief administrative officer estimated that one consultant, the joint venture firm of Montgomery-Parsons, will receive about $40 million during construction of the project. Another major consultant, CH2M Hill Co., will receive about $7.7 million. In neither case, do the figures include design fees these firms received in the early 1980s, city officials said.

The admission that the Hyperion Energy Recovery System project would cost about $400 million--more if the engineering troubles persist--sent a jolt of surprise Tuesday through the City Council’s Finance and Revenue Committee.

The committee delayed a request by the Bureau of Sanitation for 44 new maintenance employees at the Hyperion Energy Recovery System plant until city engineers can fully explain the exact cost of the project.

“I want you to demonstrate that we are not throwing good money after bad,” committee Chairman Zev Yaroslavsky said.

Under prodding from Yaroslavsky, top city engineers conceded that Bradley was wrong when he said--during a brief appearance at the Hyperion Energy Recovery System plant Tuesday--that the troubled project was never intended to handle all of the city’s sludge.

Both Lewis, speaking for City Engineer Robert Horii, and Deputy Director of Sanitation Harry Sizemore said that until recently it was hoped that the project would burn virtually all of the city’s sludge.